With Democrats retaining control of the White House and of the Senate it is very unlikely that there will be an extension of the current $5 million exemption for transferring assets to children by gift or on death. On January 1, 2013 the exemption drops to $1 million and the tax rate goes up from 35% to 55%. We strongly encourage all of our clients (and all taxpayers) to gift today and take advantage of the $5 million exemption before it disappears. The difference between what you children will get if you plan today, versus putting it off until 2013 is literally in the millions. Gift Now!
To allay some of your concerns, a gift does not mean that the assets go to the children outright. The gift maybe to a trust for the benefit of the kids, with the parents retaining control, or the gift maybe of an LLC interest, with the parents retaining control of the LLC.